35 U.S.C.A. § 284 Page 1 Part III. Patents and Protection ... · Patents and Protection of Patent Rights ... (2000). Federal circuit: A case study in ... Proof of Patentability and

Effective: November 29, 2000

United States Code Annotated CurrentnessTitle 35. Patents (Refs & Annos)

Part III. Patents and Protection of Patent RightsChapter 29. Remedies for Infringement of Patent, and Other Actions (Refs & Annos)

284. Damages

Upon finding for the claimant the court shall award the claimant damages adequate to compensate for the in-fringement, but in no event less than a reasonable royalty for the use made of the invention by the infringer, to-gether with interest and costs as fixed by the court.

When the damages are not found by a jury, the court shall assess them. In either event the court may increase thedamages up to three times the amount found or assessed. Increased damages under this paragraph shall not applyto provisional rights under section 154(d) of this title.

The court may receive expert testimony as an aid to the determination of damages or of what royalty would bereasonable under the circumstances.

CREDIT(S)

(July 19, 1952, c. 950, 66 Stat. 813; Nov. 29, 1999, Pub.L. 106-113, Div. B, 1000(a)(9) [Title IV, 4507(9)],113 Stat. 1536, 1501A-566.)

HISTORICAL AND STATUTORY NOTES

Revision Notes and Legislative Reports

1952 Acts. Based on Title 35, U.S.C., 1946 ed., 67 and 70, part (R.S. 4919 [derived from Act July 8, 1870, c.230, 59, 16 Stat. 207]; R.S. 4921 [derived from Act Jul 8, 1870, c. 230, 55, 16 Stat. 206], amended (1) Mar.3, 1897, c. 391, 6, 29 Stat. 694, (2) Feb. 18, 1922, c. 58, 8, 42 Stat. 392, (3) Aug. 1, 1946, c. 726, 1, 60Stat. 778).

The section consolidates the provisions relating to damages in R.S. 4919 and 4921 with some changes in lan-guage.

1999 Acts. Statement by President, see 1999 U.S. Code Cong. and Adm. News, p. 290.

Amendments

35 U.S.C.A. 284 Page 1

2009 Thomson Reuters/West. No Claim to Orig. US Gov. Works.

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1999 Amendments. Pub.L. 106-113 [ 4507(9)] added at the end of the second undesignated paragraph the fol-lowing: Increased damages under this paragraph shall not apply to provisional rights under section 154(d) ofthis title.

Effective and Applicability Provisions

1999 Acts. Amendment by Pub.L. 106-113, Div. B, 1000(a)(9) [Title IV, 4507(9)], effective Nov. 29, 2000,and applicable to all applications filed on or after that date (including international applications designating theUnited States); patents resulting from an international application filed before November 29, 2000 and applica-tions published pursuant to 35 U.S.C.A 122(b) or Article 21(2) of the treaty defined in 35 U.S.C.A 351(a) res-ulting from an international application filed before November 29, 2000 shall not be effective as prior art as ofthe filing date of the international application, but such patents shall be effective as prior art in accordance with35 U.S.C.A. 102(e) in effect on November 28, 2000, and all applications complying with 35 U.S.C.A. 371that resulted from international applications filed on or after that date, see Pub.L. 106-113, Div. B, 1000(a)(9)[Title IV, 4508], as amended, set out as a note under 35 U.S.C.A. 10.

CROSS REFERENCES

Action for infringement of patent, see 35 USCA 281.Attorney fees awarded in action for--

Copyright infringement, see 17 USCA 505.Patent infringement, see 35 USCA 285.

Costs of previously dismissed action, see Fed.Rules Civ.Proc. Rule 41, 28 USCA.Damages in copyright infringement action, see 17 USCA 504.Deductions for damages sustained as result of patent infringement, see 26 USCA 186.Effect of rule 54 on former 67 of this title, see Fed.Rules Civ.Proc. Rule 54, 28 USCA.Fees and allowances to witnesses, see 28 USCA 1821 et seq.Judgment and costs, see Fed.Rules Civ.Proc. Rule 54, 28 USCA.Offer of judgment, see Fed.Rules Civ.Proc. Rule 68, 28 USCA.Taxation of costs, generally, see 28 USCA 1920 et seq.Uruguay Round Agreements contents and term of patent and remedies, see 35 USCA 154.

LAW REVIEW COMMENTARIES

Arbitration of patent disputes: An important option in the age of information technology. Note, 4 Ford-ham Intell.Prop.Media & Ent.L.J. 599 (1993).

At the end of the second rainbow. N. Richard Powers, 7 Del.Law. 18 (1989).

Compiled legislative history of 35 U.S.C. 284: The patent compensation statute. Vincent P. Tassinari, 31UWLA L.Rev. 45 (2000).

Federal circuit: A case study in specialized courts. Rochelle Cooper Dreyfuss, 64 N.Y.U.L.Rev. 1 (1989).

Grain Processing and Crystal Semiconductor: Use of economic methods in damage calculations will ac-curately compensate for patent infringement. Liane M. Peterson, 13 Fed. Circuit B.J. 41 (2003).

How to avoid increased damages and attorneys' fees: The duties of the accused infringer and the patent

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owner. Kirk M. Hartung, 20 J.Marshall L.Rev. 433 (1987).

Intellectual property rights in software--A look at the basics. David R. Syrowik, 65 Mich.B.J. 292 (1986).

Law and economics of patent infringement damages. Mark A. Glick, 10 Utah B.J. 11 (March 1997).

Let the games begin: Incentives to innovation in the new economy of Intellectual Property law. Amy L.Landers, 46 Santa Clara L. Rev. 307 (2006).

Patent infringement and future lost profits damages. Christopher D. Marchese, 26 Ariz.St.L.J. 747 (1994).

Patent law developments in the United States Court of Appeals for the Federal Circuit during 1986.Douglas R. Strawbridge, Daniel W. McDonald, and R. Carl Moy, 36 Am.U.L.Rev. 861 (1987).

Quiet revolution in patents. Alfred J. Mangels, 43 J.Mo.B. 545 (1987).

Reasonable royalty damages and the ambitious patentee Georgia-Pacific revisited. Jerald E. Rosenblum,78 J.Pat. & Trademark Off.Soc'y 581 (1996).

Recent developments in patent law--decisions by the U.S. Court of Appeals for the Federal Circuit. GaleR. Peterson and Derrick A. Pizarro, 11 Tex. Intell. Prop. L.J. 483 (2003).

Research tool patents: Judicial remedies. Donald R. Ware, 30 AIPLA Q.J. 267 (2002).

Rite-Hite Corp. v. Kelley Co.: Federal Circuit awards damages for harm done to a patient not in suit. 27Loy.U.Chi.L.J. 665 (1996).

Software Patent Institute and the challenge of software-related patents. David R. Syrowik and Roland J.Cole, 73 Mich.B.J. 544 (1994).

The market share rule with price erosion: Patent infringement lost profits damages after Crystal. Roy J.Epstein, 31 AIPLA Q.J. 1 (2003).

Understanding and addressing the unfair dilemma created by the doctrine of willful patent infringement.William F. Lee and Lawrence P. Cogswell, III, 41 Hous. L. Rev. 393 (2004).

LIBRARY REFERENCES

American Digest System

Patents 275, 318, 319.Key Number System Topic No. 291.

RESEARCH REFERENCES

ALR Library

27 ALR, Fed. 2nd Series 151, Construction and Application of Patent Act--United States Supreme Court Cases.

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97 ALR, Fed. 694, Jurisdiction of United States Court of Appeals for Federal Circuit Under 28 U.S.C.A. 1292 and 1295.

91 ALR, Fed. 839, Interest on Award of Damages and Profits for Federal Copyright Infringement.

79 ALR, Fed. 532, Propriety of Ordering Separate Trials as to Liability and Damages, Under Rule 42(B) of Fed-eral Rules of Civil Procedure, in Actions Involving Patents and Copyrights.

66 ALR, Fed. 186, Factors to be Considered in Determining a Reasonable Royalty for Purposes of CalculatingDamages for Patent Infringement Under 35 U.S.C.A. 284.

59 ALR, Fed. 154, Willful and Deliberate Infringement as Rendering Patent Case Exceptional for Purposes of35 U.S.C.A. 285, Providing that in Exceptional Cases Court May Award Reasonable Attorneys' Fees to Pre-vailing...

41 ALR, Fed. 959, Interlocutory Appeals in Patent Cases Under 28 U.S.C.A. 1292(A)(4).

35 ALR, Fed. 551, Laches as Defense in Patent Infringement Suit.

18 ALR, Fed. 690, Right to Jury Trial in Patent Infringement Action in Federal Court.

9 ALR 5th 63, Right to Prejudgment Interest on Punitive or Multiple Damages Awards.

6 ALR 5th 883, Release of One Joint Tortfeasor as Discharging Liability of Others Under Uniform ContributionAmong Tortfeasors Act and Other Statutes Expressly Governing Effect of Release.

16 ALR 4th 11, Liability Insurance Coverage as Extending to Liability for Punitive or Exemplary Damages.

22 ALR 3rd 563, Power of Federal Courts of Appeals to Transfer Cases Between Circuits.

66 ALR 2nd 606, Assignability of Licensee's Rights Under Patent Licensing Contract.

134 ALR 1225, Comment Note.--Release of One of Two or More Presons Whose Independent Tortious ActsCombine to Produce an Injury as Releasing Other or Others.

91 ALR 884, Motion for Summary Judgment as Searching Record.

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87 ALR 1205, Declaration of Rights or Declaratory Judgments.

52 ALR 197, Interest on Claim for Legal Services.

Encyclopedias

26 Am. Jur. Proof of Facts 3d 119, Lost Profits Resulting from Tortious Injury to Business.

64 Am. Jur. Proof of Facts 3d 1, Proof of Patentability and Nonpatentability of Method of Electronic Commerce.

84 Am. Jur. Proof of Facts 3d 243, Establishing Liability for Infringement of a Utility Patent.

88 Am. Jur. Proof of Facts 3d 75, Establishing Liability for Infringement of a Plant Patent.

89 Am. Jur. Proof of Facts 3d 1, Establishing the Defense of Issue Preclusion in a Subsequent Patent Infringe-ment Suit.

94 Am. Jur. Proof of Facts 3d 179, Establishing Liability of a Generic Drug Manufacturer for Inducing PatentInfringement.

96 Am. Jur. Proof of Facts 3d 1, Establishing the Defense of Patent Invalidity.

54 Am. Jur. Trials 261, Defending the Software Infringement Case.

56 Am. Jur. Trials 293, A Guide to the Federal Rules of Civil Procedure.

Am. Jur. 2d Patents 776, Remedies and Amount of Recovery; Attorney's Fees.

Am. Jur. 2d Patents 811, Governmental Bodies.

Am. Jur. 2d Patents 909, Expert Testimony.

Am. Jur. 2d Patents 960, Increased Damages for Willful Infringement.

Am. Jur. 2d Patents 962, Accounting Procedure.

Am. Jur. 2d Patents 963, Accounting Procedure--Award of Interest.

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Forms

Federal Procedural Forms 19:137, Complaint--To Enjoin and Recover Damages for Infringement of Patent byReceiver [28 U.S.C.A. 754, 959(A), 1338(A), 1400(B), 35 U.S.C.A. 281; Fed. R. Civ. P. 66].

Federal Procedural Forms 52:316, Complaint--For Infringement of Patent--General Form [28 U.S.C.A. 1338(A); Fed. R. Civ. P. 8(A), 65].

Federal Procedural Forms 52:317, Complaint--For Infringement of Patent--Injunction and Damages--PatentOwned by Merged Corporations [28 U.S.C.A. 1338(A), 1400(B); 35 U.S.C.A. 271, 281, 283 to 285; Fed.R. Civ. P....

Federal Procedural Forms 52:318, Complaint--For Infringement of Patent--Injunction and Damages--TradeDress and Product Imitation Infringement [28 U.S.C.A. 1338(A), 1400(B); 35 U.S.C.A. 271, 281, 283 to285; Fed....

Federal Procedural Forms 52:319, Complaint--For Infringement of Patent--Inducement of Infringement [28U.S.C.A. 1338(A), 1400(B); 35 U.S.C.A. 271, 281, 283 to 285; Fed. R. Civ. P. 8(A), 65].

2A West's Federal Forms 1750, Introduction--Damages.

2A West's Federal Forms 1755, Count for Infringement--Making Device and Shipping to Foreign Countries.

1AA West's Federal Forms 502, Interest--General Comment.

Am. Jur. Pl. & Pr. Forms Patents 20, Complaint in Federal Court--United States District Court--Infringementof Patent--General Form.

Am. Jur. Pl. & Pr. Forms Patents 23, Complaint in Federal Court--United States District Court--Infringementof Patent--Against Former Employees.

Am. Jur. Pl. & Pr. Forms Patents 24, Complaint in Federal Court--United States District Court--Infringementof Patent--For Injunction and Damages--Patent Owned by Merged Corporation.

Am. Jur. Pl. & Pr. Forms Patents 25, Complaint in Federal Court--United States District Court--Infringementof Patent--Inducement of Infringement.

Am. Jur. Pl. & Pr. Forms Patents 26, Complaint in Federal Court--United States District Court--By Web De-veloper--Against Internet Service Provider--For Patent Infringement--Use of Design to Facilitate Web...

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Am. Jur. Pl. & Pr. Forms Receivers 357, Complaint, Petition, or Declaration--To Enjoin and Recover Damagesfor Infringement of Patent by Receiver.

American Jurisprudence Legal Forms 2d 196:54, Annotation References.

Treatises and Practice Aids

Eckstrom's Licensing in Foreign & Domestic Ops. 4:31, Remedies--Damages.

Eckstrom's Licensing in Foreign & Domestic Ops. 4:32, Remedies--Increased Damages.

Eckstrom's Licensing in Foreign & Domestic Ops. 4:33, Remedies--Prejudgment Interest.

Eckstrom's Licensing in Foreign & Domestic Ops. 8C:43, Patent Reexamination--Effect on Litigation.

Eckstrom's Licensing in Foreign & Domestic Ops. App. 8A-D, Uniform Trade Secrets Act (With Prefatory Noteand Comments) Drafted by the National Conference of Commissioners on Uniform State Laws.

Eckstrom's Licensing in Foreign & Domestic Ops. 13:29.50, Damages for Patent Infringement.

Federal Procedure, Lawyers Edition 60:911, Remedies and Amount of Recovery.

Federal Procedure, Lawyers Edition 60:1044, Survival of Action; Substitution of Parties.

Federal Procedure, Lawyers Edition 60:1103, Expert Testimony.

Federal Procedure, Lawyers Edition 60:1154, Generally; Reasonable Royalty.

Federal Procedure, Lawyers Edition 60:1156, Increased Damages for Willful Infringement.

Federal Procedure, Lawyers Edition 60:1157, Accounting Procedure.

Federal Procedure, Lawyers Edition 60:1158, Accounting Procedure--Award of Interest.

Federal Procedure, Lawyers Edition 60:1159, Costs.

Patent Damages Law and Practice 1:1, Overview of Damages Available Under the 1952 Patent Act.

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Patent Damages Law and Practice 1:3, Overview of Basic Damages Theories--Lost Profits and ReasonableRoyalty.

Patent Damages Law and Practice 2:1, Introduction to Lost Profits.

Patent Damages Law and Practice 3:2, Introduction--Patent Damages: Adequate to Compensate.

Patent Damages Law and Practice 3:3, Introduction--Burden of Proof.

Patent Damages Law and Practice 3:4, Analytical Approach.

Patent Damages Law and Practice 3:9, Willing Licensor-Willing Licensee Fiction--Existence of an Estab-lished Royalty for the Patent in Suit--Law Before the Advent of Reasonable Royalties.

Patent Damages Law and Practice 4:1, Introduction.

Patent Damages Law and Practice 1:16, Costs.

Patent Damages Law and Practice 1:19, Enhancement of Damages: Willful Infringement--Punitive Nature ofEnhanced Damages and the Court's Discretion.

Patent Damages Law and Practice 2:23, Proving Entitlement to Lost Profits Damages--Causation and the ButFor Standard.

Patent Damages Law and Practice 2:74, Special Case of Future Lost Profits Damages--Raising the EvidentiaryThreshold for Future Lost Profits.

Patent Damages Law and Practice 4:26, Determining the Amount of Enhanced Damages.

Patent Damages Law and Practice 7:12, Discovery Forms--Sample Discovery Requests from the Patent Own-er--Requests for Production of Documents and Things.

Patent Damages Law and Practice 7:15, Discovery Forms--Sample Discovery Requests from the Patent Own-er--Interrogatories.

Patent Damages Law and Practice 7:16, Discovery Forms--Sample Discovery Requests from the Patent Own-er--Requests for Production of Documents and Things.

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Patent Damages Law and Practice 7:20, Sample Jury Instructions for Patent Damages--Damages Instructions--Patent Damages Instructions: General.

Patent Damages Law and Practice 7:37, Sample Jury Instructions for Patent Damages--Damages Instructions--Patent Damages: Reasonable Royalty.

Patent Damages Law and Practice App B1, Detailed Federal Circuit Case Summaries.

Patent Damages Law and Practice 3:19.50, The Opinion of Qualified Experts.

Patent Damages Law and Practice 4:13.50, Costs--Quick Summary.

Patent Law Fundamentals 1:20, Duration of Patents.

Patent Law Fundamentals 4:22, Remedies.

Patent Law Fundamentals 18:18, Government Access to Privately Owned Inventions--Adjudication of ClaimsAgainst the United States for Intellectual Property Infringement.

Patent Law Fundamentals 19:16, Patent and Invention Development Agreements--Royalties--Royalty Ratesand Royalty Bases.

Patent Law Fundamentals 20:54, Damages.

Patent Law Fundamentals 20:55, Damages--Compensatory Damages.

Patent Law Fundamentals 20:56, Damages--Compensatory Damages--Direct Damages--Measured by PatentOwner's Lost Profits.

Patent Law Fundamentals 20:57, Damages--Compensatory Damages--Direct Damages--Measured by a Reas-onable Royalty.

Patent Law Fundamentals 20:59, Damages--Compensatory Damages--Direct Damages--Measured by a Reas-onable Royalty--Hypothetical Negotiations.

Patent Law Fundamentals 20:61, Damages--Compensatory Damages--Direct Damages--Additional Remedy inthe Case of a Design Patent.

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Patent Law Fundamentals 20:63, Damages--Compensatory Damages--Interest on Damages Award.

Patent Law Fundamentals 20:64, Damages--Exemplary (Punitive) Damages.

Patent Law Fundamentals 20:67, Costs.

Patent Law Fundamentals 15:128, Extension of Patent Term Due to Prosecution Delay.

Patent Law Fundamentals 20:116, Federal Court Appellate Jurisdiction--Scope of Appellate Review.

Patent Law Fundamentals App. 4(D), Uniform Trade Secrets Act (With 1985 Amendments).

Restatement (Third) of Restitution 42, Interference With Intellectual Property and Similar Rights.

Trade Secrets Law App A1, 1979 Uniform Trade Secrets Act: With Prefatory Note and Comments.

Trade Secrets Law App A2, State Trade Secret Statutes--Variations on the Uniform Act.

West's Federal Administrative Practice 3930, Effect of Early Filing of Patent Application.

West's Federal Administrative Practice 3953, Infringement--Lack of Knowledge or Intent is Immaterial.

West's Federal Administrative Practice 3954, Infringement--Must Occur During Term of Patent.

West's Federal Administrative Practice 3956, Infringement--Remedies.

9 Wright & Miller: Federal Prac. & Proc. 2312, Particular Cases and Issues--Patents and Copyrights.

NOTES OF DECISIONS

I. GENERALLY 1-70II. DAMAGES 71-210III. COSTS 211-260

I. GENERALLY

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Admissibility of evidence 35Burden of proof 32Causation 12Clearly erroneous findings, review 45Commercial success, defenses 15Constitutionality 2Corporations 10Counterclaims 26Covenants not to sue 7Defenses 14-21

Defenses - Generally 14Defenses - Commercial success 15Defenses - Estoppel 16Defenses - Failure to sue 17Defenses - Good faith 18Defenses - Misrepresentations 19Defenses - Noninfringement 20Defenses - Profits by patentee 21

Degree of proof 34Discovery 29Dismissal 27Estoppel, defenses 16Expert witnesses 37Failure to sue, defenses 17Good faith, defenses 18Government liability 11Inconsistent findings, review 46Inferences 31Instructions 39Law governing 4Law of the case 48Misrepresentations, defenses 19Moot questions, review 44Nature of section 6Noninfringement, defenses 20Persons entitled to sue 8Persons liable 9Pleadings 25Post judgment infringement 42Power of Congress 5Presumptions 30Prior law 1Prior litigation 23Profits by patentee, defenses 21Purpose 3

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Questions of fact 38Rehearing 40Release 22Remand 49Res judicata 24Review 43-47

Review - Generally 43Review - Clearly erroneous findings 45Review - Inconsistent findings 46Review - Moot questions 44Review - Sufficiency of evidence 47

Shifting of burden of proof 33Stay of proceedings 41Sufficiency of evidence 36Sufficiency of evidence, review 47Summary judgment 28Survival or abatement of action 13

1. Prior law

Former 67 and 70 of this title made no change in the rule of damages established in actions at law. McCunev. Baltimore & O R Co, C.C.A.3 (Pa.) 1907, 154 F. 63, 83 C.C.A. 175, certiorari denied 28 S.Ct. 255, 207 U.S.588, 52 L.Ed. 353.

2. Constitutionality

This section, authorizing trial judge to increase damages up to three times the amount found by jury or assessedby trial judge in timely infringement action, does not deny any right to jury trial under U.S.C.A. Const. Amend.7. Swofford v. B & W, Inc., C.A.5 (Tex.) 1964, 336 F.2d 406, 142 U.S.P.Q. 291, certiorari denied 85 S.Ct. 653,379 U.S. 962, 13 L.Ed.2d 557, 144 U.S.P.Q. 780. Jury 31.2(1)

The provision of former 70 of this title, which authorized increased damages, did not violate U.S.C.A. Const.Amend. 7. Filer & Stowell Co. v. Diamond Iron Works, C.C.A.7 (Wis.) 1921, 270 F. 489, certiorari denied 41S.Ct. 533, 256 U.S. 691, 65 L.Ed. 1174.

3. Purpose

Primary purpose of compensatory damages in patent infringement action is to return patent owner to financialposition owner would have occupied but for infringement. Carborundum Co. v. Molten Metal Equipment Innov-ations, Inc., C.A.Fed. (Ohio) 1995, 72 F.3d 872, 37 U.S.P.Q.2d 1169. Patents 319(1)

Patent statute provision permitting damages adequate to compensate provides economic redress sufficient torestore patentee to its rightful position absent infringement. King Instruments Corp. v. Perego, C.A.Fed. (Mass.)1995, 65 F.3d 941, 36 U.S.P.Q.2d 1129, rehearing denied, in banc suggestion declined 72 F.3d 855, certioraridenied 116 S.Ct. 1675, 517 U.S. 1188, 134 L.Ed.2d 778. Patents 319(1)

The goal of assessing royalties in patent infringement cases is to place plaintiff in same position it would have

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been in if patent had not been infringed. Devex Corp. v. General Motors Corp., C.A.3 (Del.) 1981, 667 F.2d 347,212 U.S.P.Q. 643, certiorari granted 102 S.Ct. 2267, 456 U.S. 988, 73 L.Ed.2d 1283, certiorari denied 102 S.Ct.2270, 456 U.S. 990, 73 L.Ed.2d 1285, rehearing denied 106 S.Ct. 212, 474 U.S. 890, 88 L.Ed.2d 181, affirmed103 S.Ct. 2058, 461 U.S. 648, 76 L.Ed.2d 211, 217 U.S.P.Q. 1185. Patents 319(1)

Enhancement provision of this section is designed to permit adequate compensation for an infringement wherestrict legal rules would not afford it. Trio Process Corp. v. L. Goldstein's Sons, Inc., C.A.3 (Pa.) 1981, 638 F.2d661. Patents 319(3)

The purpose of an award of damages for patent infringement is to give the plaintiff reasonable and full compens-ation for the loss incurred because of the infringement. Milgo Electronic Corp. v. United Business Communica-tions, Inc., C.A.10 (Kan.) 1980, 623 F.2d 645, 206 U.S.P.Q. 481, certiorari denied 101 S.Ct. 794, 449 U.S. 1066,66 L.Ed.2d 611, 208 U.S.P.Q. 376. Patents 319(1)

Since the purpose of amendment by Act Aug. 1, 1946, c. 726, 1, 60 Stat. 778, to former 70 of this title whichrelated to damages for infringement of a valid patent was only to eliminate an infringer's profit as an element ofa patentee's recovery, the rules having allowed a patentee to recover his gross established royalty with interestfrom date payment should have been made still applied. Marvel Specialty Co., Inc. v. Bell Hosiery Mills, Inc.,C.A.4 (N.C.) 1967, 386 F.2d 287, 155 U.S.P.Q. 545, certiorari denied 88 S.Ct. 1409, 390 U.S. 1030, 20 L.Ed.2d286, 157 U.S.P.Q. 720. Patents 318(1)

Congress' overriding purpose in enacting statute setting forth standard for damages for patent infringement wasto allow patent owners complete compensation. Mil-Tec USA, Inc. v. ABC Tool, Inc., M.D.Fla.1996, 939F.Supp. 853, reconsideration denied 1997 WL 201716. Patents 319(1)

This section requiring award adequate to compensate for infringement of patent and no less than reasonable roy-alty for use made of invention by infringer was intended to afford fair compensation in cases where victimizedpatentee is unable to prove that he lost a measurable amount of profits as result of the infringement and this sec-tion provides alternative way of recovering general compensatory damages. Georgia-Pacific Corp. v. U. S. Ply-wood Corp. (State Report Title: Georgia-Pacific Corp. v. U.S. Plywood-Champion Papers Inc.), S.D.N.Y.1970,318 F.Supp. 1116, 166 U.S.P.Q. 235, modified 446 F.2d 295, 170 U.S.P.Q. 369, certiorari denied 92 S.Ct. 105,404 U.S. 870, 30 L.Ed.2d 114, 171 U.S.P.Q. 322. Patents 319(1)

The sole object of the provision of former 70 of this title which related to profits was to enable the patentee torecover, by suit in equity, not only the profits made by the defendant, but also damages sustained by the pat-entee. Bancroft v. Acton, C.C.N.Y.1870, 2 F.Cas. 578, No. 833.

4. Law governing

Interest on amount of damages allowed in patent case, as for nonpayment of patent license royalties, should fol-low state rule as to legal rate. Hope Basket Co. v. Product Advancement Corp., W.D.Mich.1952, 104 F.Supp.444, 93 U.S.P.Q. 94. Federal Courts 415

5. Power of Congress

The provision of former 70 of this title which authorized courts of equity to increase the damages beyond theamount awarded as compensatory, was within the power of Congress. Taylor v. Ford Motor Co., N.D.Ill.1924, 2

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F.2d 473.

6. Nature of section

The provisions of former 67 of this title which permitted recovery of treble damages for infringement were re-medial. Perkins Oil Well Cementing Co. v. Owen, S.D.Cal.1923, 293 F. 759.

Suit for damages for infringement of patent, past or present, was not an action for penalty, even though Congressallowed court to assess additional damages not to exceed double the amount actually suffered. Armstrong v. Al-len B. Du Mont Laboratories, D.C.Del.1955, 137 F.Supp. 659, 108 U.S.P.Q. 70. Patents 280

Former 70 of this title, which related to damages for patent infringement, was not penal but remedial and dam-ages contemplated may have been awarded whether wrong was intentional or unwitting. Activated Sludge v.Sanitary Dist. of Chicago, N.D.Ill.1946, 64 F.Supp. 25, 68 U.S.P.Q. 137, affirmed 157 F.2d 517, 71 U.S.P.Q.316, certiorari denied 67 S.Ct. 970, 330 U.S. 834, 91 L.Ed. 1281, 72 U.S.P.Q. 529, rehearing denied 67 S.Ct.1092, 330 U.S. 856, 91 L.Ed. 1297, 72 U.S.P.Q. 529, rehearing denied 67 S.Ct. 1347, 331 U.S. 866, 91 L.Ed.1870. Patents 319(1)

7. Covenants not to sue

Whether breach of covenant not to sue for patent infringement gives rise to claim for damages is within compet-ence of federal judiciary to determine as a matter of federal law. Artvale, Inc. v. Rugby Fabrics Corp., C.A.2(N.Y.) 1966, 363 F.2d 1002, 150 U.S.P.Q. 401. Federal Courts 429

8. Persons entitled to sue

Where valid patent claim had been infringed by defendant, patent assignee and his licensee had right to full re-covery of damages and other assessable items in infringement action and were entitled to be heard on such is-sues as justification for increasing damages under this section, interest, costs and disbursements, and attorney'sfees, all of which are proper subject for an accounting whether taken by court or master. J. R. Clark Co. v. Jones& Laughlin Steel Corp., S.D.Ind.1960, 186 F.Supp. 22, 125 U.S.P.Q. 433, affirmed 288 F.2d 279, 129 U.S.P.Q.97, certiorari denied 82 S.Ct. 49, 368 U.S. 828, 7 L.Ed.2d 32, 131 U.S.P.Q. 498. Patents 325.11(5)

Patent infringement suit brought by licensee as assignee of all patentee's rights would not be dismissed onground that plaintiff did not have all rights therein but was limited to a certain field and defendant had been putto unnecessary expense by reason thereof, but charge of infringement would be limited accordingly and questionof expense would be considered on final event of suit as bearing upon question of costs. Woburn Degreasing Coof N J v. Spencer Kellogg & Sons, W.D.N.Y.1942, 46 F.Supp. 959. Patents 313

9. Persons liable

Nonmanagement, salaried employee of infringing corporation could not be held individually liable for infringe-ment of patent claim regarding piston device, particularly since there had been no contention that the individualenjoyed profits or derived distinct benefits from the infringement separate from those of any other salaried em-ployee. Wilden Pump & Engineering Co. v. Pressed & Welded Products Co., C.A.9 (Cal.) 1981, 655 F.2d 984,213 U.S.P.Q. 282, on remand 570 F.Supp. 224, 224 U.S.P.Q. 1074. Patents 287(6)

Patent owner has a cause of action, independent from that against an infringing manufacturer, to recover profits

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and damages and to restrain one who resells a product purchased from an infringing manufacturer. TriangleConduit & Cable Co. v. National Electric Products Corporation, C.C.A.3 (Del.) 1943, 138 F.2d 46, certioraridenied 64 S.Ct. 191, 320 U.S. 784, 88 L.Ed. 471. See, also, American Chemical Paint Co. v. Thompson Chemic-al Corp., C.A.Cal.1957, 244 F.2d 64. Patents 280

Both damages and profits are recoverable from infringers, but they are recoverable on different grounds, and therecovery of profits from one joint infringer does not preclude the recovery of damages from another. DowagiacMfg. Co. v. Deere & Webber Co., C.C.A.8 (Minn.) 1922, 284 F. 331. Patents 327(15)

Corporate officers who willfully and knowingly participate in, induce and approve acts of patent infringementare personally liable. Thompson Tool Co., Inc. v. Rosenbaum, D.C.Conn.1977, 443 F.Supp. 559. Patents287(6)

Where members of controlling family of infringing corporation were not found personally liable for the acts ofinfringement, no more than a very minor portion of the salaries and contributions to the profit-sharing accountsof the family could be attributed to infringing sales, none of payments were in excess of limits prescribed by theinternal revenue laws and all were in return for services rendered to the corporation, fact that substantial finan-cial payments were made by the corporation to the profit-sharing and pension accounts of members of the con-trolling family did not warrant treating the infringing corporation as a de facto partnership for purposes ofawarding damages for patent infringement. Jenn-Air Corp. v. Penn Ventilator Co., Inc., E.D.Pa.1975, 394F.Supp. 665, 185 U.S.P.Q. 410. Patents 319(1)

10. Corporations

Parent's willful patent infringement would be imputed to wholly owned subsidiary, even though parent was notparty to patent infringement action against subsidiary; subsidiary's board of directors was composed of memberswho each held high ranking position with parent during period of infringement and subsidiary was exclusiveseller of parent's products in United States. Afros S.P.A. v. Krauss-Maffei Corp., D.Del.1987, 671 F.Supp. 1458,5 U.S.P.Q.2d 1145. Patents 287(5)

11. Government liability

In a suit for infringement of a patent against United States officers, who used the patented article only for the be-nefit of the United States, a decree cannot be rendered against such officers for the gains and profits which ac-crued to the government from the use of such article. Belknap v. Schild, U.S.Cal.1896, 16 S.Ct. 443, 161 U.S.10, 40 L.Ed. 599. Patents 287(4); Patents 316

Owner of valid and infringed patent was entitled to reasonable and entire compensation for the unauthorized useby government. Bowser, Inc. v. U. S., Ct.Cl.1967, 388 F.2d 346, 181 Ct.Cl. 834, 156 U.S.P.Q. 406. UnitedStates 97

Where government infringer was an old customer of the patentee, it is properly deductible that the patentee, byreason of the infringement, lost the sale of his own apparatus. Waite v. U.S., Ct.Cl.1930, 69 Ct.Cl. 153, certior-ari granted 51 S.Ct. 21, 282 U.S. 817, 75 L.Ed. 731, reversed 51 S.Ct. 227, 282 U.S. 508, 75 L.Ed. 494. Patents

312(1.1)

12. Causation

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Prevailing patent infringement plaintiff can show but for causation of its damages, for purpose of recoveringlost profits, by demonstrating (1) demand for patented product, (2) absence of acceptable noninfringing alternat-ives, (3) marketing and manufacturing capability to exploit demand, and (4) amount of profit it would havemade but for infringement. Biacore v. Thermo Bioanalysis Corp., D.Del.1999, 79 F.Supp.2d 422, affirmed 30Fed.Appx. 994, 2002 WL 418166. Patents 318(4.2)

To show that infringement caused loss of profits, patent owner may proffer evidence satisfying either four-parttest, whereby it must prove demand for patented product, marketing and manufacturing capability to exploit thatdemand, absence of acceptable noninfringing substitutes, and amount of profit patent owner would have made,or two-supplier market test, whereby patent owner must show that infringer was only other supplier of patentedproduct. Ristvedt-Johnson, Inc. v. Brandt, Inc., N.D.Ill.1992, 805 F.Supp. 557. Patents 318(1)

Lost profit award in infringement action requires showing that patent holder would have made sale but for in-fringement, i.e., causation existed, and proper evidence for computation of loss of profits; evidence that showsreasonable possibility that patent holder would have made infringing sales made by infringer will suffice, andpatent holder need not prove causation as absolute certainty. Standard Havens Products, Inc. v. Gencor Indus-tries, Inc., C.A.Fed. (Mo.) 1991, 953 F.2d 1360, 21 U.S.P.Q.2d 1321, rehearing denied, rehearing in banc de-clined, certiorari denied 113 S.Ct. 60, 506 U.S. 817, 121 L.Ed.2d 28, on remand 810 F.Supp. 1072, 25U.S.P.Q.2d 1949. Patents 312(10); Patents 318(1)

In patent infringement action in two-supplier market, lost profits damages may be in form of diverted sales,eroded prices or increased expenses, but patent owner must establish causation between his lost profits and in-fringement; patent owner's burden of proof is not absolute, but is burden of reasonable probability. Lam, Inc. v.Johns-Manville Corp., C.A.Fed.1983, 718 F.2d 1056, 219 U.S.P.Q. 670. Patents 312(10); Patents318(3)

In patent infringement action in two-supplier market, lost profits damages may be in form of diverted sales,eroded prices or increased expenses, but patent owner must establish causation between his lost profits and in-fringement; patent owner's burden of proof is not absolute, but is burden of reasonable probability. Lam, Inc. v.Johns-Manville Corp., C.A.Fed.1983, 718 F.2d 1056, 219 U.S.P.Q. 670. Patents 312(10); Patents318(3)

To be entitled to damages beyond a reasonable or established royalty, patent owner must prove his actual dam-ages caused by illicit competition of infringer and must establish factual basis for causation, i.e., that, but for theinfringer's improper acts, he would have made greater sales, charged higher prices, or incurred lower expenses.Scripto-Tokai Corp. v. Gillette Co., C.D.Cal.1992, 788 F.Supp. 439, 22 U.S.P.Q.2d 1678. Patents 319(1)

Lost profits award is appropriate only if patent owner can prove that there was reasonable probability that butfor infringement, it would have made infringer's sales; but for causation may be established by proof of de-mand for patented product, absence of acceptable noninfringing substitutes, manufacturing and marketing cap-ability to exploit demand, and amount of profit patent owner would have made. Kearns v. Chrysler Corp.,C.A.Fed. (Mich.) 1994, 32 F.3d 1541, 31 U.S.P.Q.2d 1746, rehearing denied, in banc suggestion declined , certi-orari denied 115 S.Ct. 1392, 514 U.S. 1032, 131 L.Ed.2d 244, certiorari denied 115 S.Ct. 1393, 514 U.S. 1032,131 L.Ed.2d 244. Patents 319(1)

To recover lost profits as opposed to royalties, patent owner must prove causal relation between infringementand its loss of profits; patent owner must show that but for the infringement, it would have made infringer's

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sales. BIC Leisure Products, Inc. v. Windsurfing Intern., Inc., C.A.Fed. (N.Y.) 1993, 1 F.3d 1214, 27 U.S.P.Q.2d1671, rehearing denied, on remand 850 F.Supp. 224, 30 U.S.P.Q.2d 1949, reconsideration denied. Patents318(1)

Generally accepted, though not exclusive, manner that patentee can establish but for causation entitling it tolost profits in infringement case is four-factor test, requiring patentee to establish: demand for patented product;absence of acceptable non-infringing substitute; patentee's manufacturing and marketing capability to exploit de-mand; and amount of profit patentee would have made. Stryker Corp. v. Intermedics Orthopedics, Inc.,E.D.N.Y.1995, 891 F.Supp. 751, affirmed 96 F.3d 1409, 40 U.S.P.Q.2d 1065, rehearing denied , in banc sugges-tion declined. Patents 318(4.1)

To recover lost profits for patent infringement, as opposed to reasonable royalty, patent owner must prove causalrelationship between infringement and its loss of profit; to prove such causal relationship, patent owner mustshow reasonable probability that but for infringement, patent owner would have made infringer's sales. GNBBattery Technologies, Inc. v. Exide Corp., D.Del.1995, 886 F.Supp. 420, affirmed 78 F.3d 605, 38 U.S.P.Q.2d1506. Patents 318(1)

To recover damages on theory of lost profits, patentee must show that, but for infringement, it would have madeinfringer's sales; this requirement of causation implicates patentee's manufacturing capacity and marketing cap-ability, desires of customers for claimed invention, relationship of invention to products sold, and other factorspertinent to particular market of parties. Micro Motion, Inc. v. Kane Steel Co., Inc., C.A.Fed. (N.J.) 1990, 894F.2d 1318, 13 U.S.P.Q.2d 1696. Patents 318(1)

13. Survival or abatement of action

Suit for damages by patentee for prior infringement on expired patents, survived his death and could be main-tained by his executrix, and consequently causes of action for injunctive process and past infringement institutedby patentee prior to his death on patent which had not expired, also survived. Armstrong v. Allen B. Du MontLaboratories, D.C.Del.1955, 137 F.Supp. 659, 108 U.S.P.Q. 70. Patents 284

Fact that this section grants right of assessment of treble damages for infringement does not make an action onthis section a penal one so that the death of a party extinguishes the right thereon. Armstrong v. Emerson Radio& Phonograph Corp., S.D.N.Y.1955, 132 F.Supp. 176, 106 U.S.P.Q. 404. Patents 280; Patents 284

14. Defenses--Generally

Existence of substantial defense to patent infringement is not per se sufficient to defeat liability for willful in-fringement. Knorr-Bremse Systeme Fuer Nutzfahrzeuge GmbH v. Dana Corp., C.A.Fed. (Va.) 2004, 383 F.3d1337, 72 U.S.P.Q.2d 1560, on remand 372 F.Supp.2d 833, 76 U.S.P.Q.2d 1239. Patents 227

No recovery can be had of damages unless the plaintiff could have recovered such damages in an action at law.Van Kannell Revolving Door Co. v. Revolving Door & Fixture Co., S.D.N.Y.1920, 293 F. 261.

Where the owner of a patent has for years permitted its infringement, in a subsequent suit against another in-fringer he is not entitled to recover profits and damages. Marconi Wireless Telegraph Co. of America v. Nation-al Electric Signaling Co., E.D.N.Y.1914, 213 F. 815. Patents 318(1)

15. ---- Commercial success, defenses

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Actual damages may be recovered, though invention has not been commercial success. Motor Player Corp. v. Pi-ano Motors Corp., D.C.N.J.1927, 19 F.2d 993. Patents 319(1)

Fact that plaintiff patentee received no royalty from license issued by him under patent did not preclude plaintifffrom recovering damages for patent infringement. Abbott v. Barrentine Mfg. Co., N.D.Miss.1965, 255 F.Supp.890, 149 U.S.P.Q. 287. Patents 319(1)

16. ---- Estoppel, defenses

Patent infringement plaintiff, having previously prevailed on infringement claim based on prior version of ac-cused device and received reasonable royalty damages, was not collaterally estopped from asserting differenthypothetical royalty rate for current infringement; infringements were different, and market conditions underwhich hypothetical negotiations would have taken place at start of each infringement were different. AppliedMedical Resources Corp. v. U.S. Surgical Corp., C.A.Fed.2006, 435 F.3d 1356, 77 U.S.P.Q.2d 1666. Patents

327(13)

Fact that defendants, who had counterclaimed for damages as to certain patents, originally had charged plaintiffonly with infringement of one patent would not estop defendants from claiming damages for infringement ofsecond patent. Randolph Laboratories v. Specialties Development Corp., C.A.3 (N.J.) 1954, 213 F.2d 873, 102U.S.P.Q. 140, certiorari denied 75 S.Ct. 91, 348 U.S. 861, 99 L.Ed. 678, 103 U.S.P.Q. 424, certiorari denied 75S.Ct. 91, 348 U.S. 861, 99 L.Ed. 678, 103 U.S.P.Q. 425. Patents 310.11

17. ---- Failure to sue, defenses

Patentee which had notice of alleged infringement but notified infringer that it would do nothing in view ofchanges made by infringer had forfeited right to accounting and damage for past infringements by failing to sue,but its right to prevent future infringements was unaffected. Royal-McBee Corp. v. Smith-Corona Marchant,Inc., C.A.2 (Conn.) 1961, 295 F.2d 1, 130 U.S.P.Q. 377. Patents 283(1)

18. ---- Good faith, defenses

Damages may be mitigated by the innocence of the infringer where in good faith he is ignorant of existence ofthe patent. Corning v. Burden, U.S.N.Y.1853, 56 U.S. 252, 15 How. 252, 14 L.Ed. 683. See, also, Mowry v.Whitney, Pa.1871, 14 Wall. 434, 21 L.Ed. 858; Merriam v. Smith, C.C.Mass.1882, 11 F. 588; Hogg v. Emerson,N.Y.1850, 11 How. 587, 13 L.Ed. 824; Parker v. Corbin, C.C.Ohio 1848, Fed.Cas. No. 10,731; Bryce v. Dorr,C.C.Mich.1845, 3 McLean, 582, Fed.Cas. No. 2,070.

Mere fact that infringer brought suit to challenge validity of patent of apparatus and method for stretch-wrappingloads stacked on pallet with various polymer films was not evidence that infringer had reasonable basis for be-lieving in right to continue allegedly infringing acts and that infringement was not willful. Kaufman Co., Inc. v.Lantech, Inc., C.A.Fed. (Ohio) 1986, 807 F.2d 970, 1 U.S.P.Q.2d 1202. Patents 312(8)

Infringement is willful, for purpose of obtaining increase in compensatory damages award, if infringer pro-ceeded without reasonable belief that it would not be held liable for infringement. Chiron Corp. v. Genentech,Inc., E.D.Cal.2002, 268 F.Supp.2d 1117. Patents 319(3)

Infringers acted in good faith in attempting to design around the patent and had a reasonable basis for believingthat their device was not infringing, and thus did not engage in willful infringement; it was understandable for

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